Pages

Friday, April 4, 2014

Importing Counterfeit Merchandise and U.S. Customs and Border Protection

Every day, counterfeit merchandise of all kinds attempts to enter the United States. Whether it be handbags, jewelry, clothing, electronics, or medicines, it amounts to a worldwide phenomenon totalling billions of dollars. Fortunately, U.S. Customs and Border Protection (CBP) officers at the air, ocean, and land borders have the legal authority to stop, examine, and seize suspected counterfeit merchandise. That is why companies as diverse as Rolex, Gucci, Apple, Ford, and Disney register their trademarks with the U.S. Patent and Trademark Office, and then take the additional, important step of recording those trademarks with CBP.

CBP just issued its Fiscal Year 2013 seizure statistics for counterfeit merchandise that attempted to illegally enter the United States. You guessed right, the country of origin for the most counterfeit merchandise was again China, and the seizure statistics continue to climb year after year in both the number of seizures and the value of the seized merchandise.

On Thursday, April 11, 2014, in Las Vegas, at the 40th Annual Conference of the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA), I will provide a lecture on "Intellectual Property Rights: How to Detect and Avoid the Scammers". In other words, how, why, and when CBP targets and seizes suspected counterfeit merchandise, how trademark owners may assist CBP to enforce the intellectual property rights laws, and how owners of merchandise wrongly seized by CBP may attempt to get their merchandise released through the administrative petition process with the CBP Fines, Penalties, and Forfeitures Offices. My fellow presenter at the Conference on this topic is Robert 'Bob' Crane, U.S. Customs Program Manager, Global Security and Brand Protection, Underwriters Laboratories.

Too often, CBP officers seize merchandise that is suspected of being counterfeit or otherwise infringing a trademark or copyright, but really does not. The concept of gray-market, genuine merchandise still seems to be a challenging one for CBP. Moreover, when suspected counterfeit merchandise is seized by CBP, the current administrative petition process described at 19 CFR Part 171 takes far too long to resolve, especially when the value exceeds $100,000, and the case must be referred from the ports to CBP HQ in Wshington, D.C. By the time CBP realizes and agrees that the merchandise is not counterfeit, and releases it back to the importer, it could be a year later. The merchandise no longer has the same value, and the contract for the resale of the merchandise has likely been cancelled, so the importer who did (or tried to do) everything right, but the merchandise has been seized anyway, either because CBP or the importer made an error. In those situations, the importing company is royally you know what. These situations do not show up in the annual CBP statistics, but is an unfortunate reality for many.

Disclaimer

This commentary is informational only, is not legal advice and does not establish an attorney-client relationship. Views expressed are of the individual user and do not represent the views of GrayRobinson, P.A. its owners or its management. You should seek appropriate and properly licensed legal advice before making any decision based on these comments.